Quick answer: Government employees do not get the PD 851 13th month pay. Instead, qualified national government personnel receive a year-end bonus equal to one month of basic pay (computed as of October 31) plus a ₱5,000 cash gift, released with the first agency payroll for November, and a separate mid-year bonus of one month of basic pay released from May 15. Private-sector employees are the ones covered by the 13th month pay formula.
Why government workers are not under the 13th month pay law
Presidential Decree No. 851 and its implementing rules exclude the Government and its political subdivisions, including government-owned or controlled corporations, except those operating essentially as private subsidiaries of the government. Public servants have their own bonus rules, created by Republic Act No. 6686 (1988) and later amended by RA 8441, and implemented through budget circulars of the Department of Budget and Management (DBM).
The government year-end bonus and cash gift
| Item | Rule |
|---|---|
| Year-end bonus | One month of basic pay as of October 31 |
| Cash gift | ₱5,000 |
| Service requirement | At least four months of service from January 1 to October 31 |
| Must still be in service | On October 31 |
| Release | With the first agency payroll for November (DBM Budget Circular No. 2024-3) |
These details were confirmed by DBM for the 2025 cycle, which covered civilian, military and uniformed personnel in national agencies. DBM announced that the 2025 bonus and cash gift would come with the first November payroll. The same circular, Budget Circular No. 2024-3, amended the release date that used to be on or after November 15.
As of October 17, 2026 DBM has not published a 2026 announcement. Expect the usual early-November notice and check dbm.gov.ph for any change in the release date or amount.
If you have under four months of service or leave before October 31
RA 6686 itself provides smaller cash gifts for employees with less than four months of service. DBM’s earlier guidelines also allowed a pro-rated year-end bonus and cash gift for personnel who retired or separated from service before October 31 after at least four months of service. Because rules are reissued by circular, confirm the current treatment with your agency’s HR or accounting office before relying on it.
The mid-year bonus
The mid-year bonus is a separate benefit equal to one month of basic pay as of May 15, with a satisfactory performance rating and at least four months of combined service. DBM began releasing the 2026 mid-year bonus on May 15, 2026 under Budget Circular No. 2017-2, with ₱73.456 billion allocated for over 1.9 million workers. Local government personnel are covered subject to approval by their local council.
Example: bonuses of an employee earning ₱40,000 a month
- Mid-year bonus: ₱40,000
- Year-end bonus: ₱40,000
- Cash gift: ₱5,000
- Total: ₱85,000
Under the ₱90,000 ceiling this is entirely tax-exempt. For an employee earning ₱60,000 a month, the total is ₱60,000 + ₱60,000 + ₱5,000 = ₱125,000, so ₱35,000 is above the ceiling and is added to taxable income. (Amounts shown are illustrations using basic pay on the cut-off date; mid-year and year-end amounts can differ if your salary changed between May 15 and October 31.)
Tax on government bonuses
RA 10963 (the TRAIN law) states that the ₱90,000 exclusion covers benefits received by officials and employees of the national and local government under RA 6686 and benefits of employees not covered by PD 851, together with other benefits such as productivity incentives and the Christmas bonus. For the full rule and examples, see is 13th month pay taxable. To see what a taxable excess does to your annual tax, use the Income Tax Calculator.
Teachers, private schools and GOCC employees
- Public school teachers: government employees, so year-end bonus, cash gift and mid-year bonus.
- Private school teachers: covered by the 13th month pay law if they rendered at least one month of service in the year, regardless of how many months they teach.
- GOCC employees: depends on the charter and on whether the corporation operates essentially as a private subsidiary. Ask your HR.
Related reading
- How to compute 13th month pay for private employees
- Is 13th month pay taxable?
- 14th month pay: is it mandatory?
Sources: Presidential Decree No. 851 and Republic Act No. 6686 (LawPhil); DBM Budget Circular No. 2024-3 and DBM press releases on the 2025 year-end bonus and 2026 mid-year bonus; RA 10963 (tax exemption). For estimation only — confirm with your agency’s HR or accounting office.